Correlation Between Hana Financial and PanGen Biotech
Can any of the company-specific risk be diversified away by investing in both Hana Financial and PanGen Biotech at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Hana Financial and PanGen Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hana Financial and PanGen Biotech, you can compare the effects of market volatilities on Hana Financial and PanGen Biotech and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Hana Financial with a short position of PanGen Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Financial and PanGen Biotech.
Diversification Opportunities for Hana Financial and PanGen Biotech
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hana and PanGen is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Hana Financial and PanGen Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PanGen Biotech and Hana Financial is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Hana Financial are associated (or correlated) with PanGen Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PanGen Biotech has no effect on the direction of Hana Financial i.e., Hana Financial and PanGen Biotech go up and down completely randomly.
Pair Corralation between Hana Financial and PanGen Biotech
Assuming the 90 days trading horizon Hana Financial is expected to generate 36.2 times less return on investment than PanGen Biotech. But when comparing it to its historical volatility, Hana Financial is 2.55 times less risky than PanGen Biotech. It trades about 0.01 of its potential returns per unit of risk. PanGen Biotech is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 404,000 in PanGen Biotech on September 12, 2024 and sell it today you would earn a total of 111,000 from holding PanGen Biotech or generate 27.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.31% |
| Values | Daily Returns |
Hana Financial vs. PanGen Biotech
Performance |
| Timeline |
| Hana Financial |
| PanGen Biotech |
Hana Financial and PanGen Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Financial and PanGen Biotech
The main advantage of trading using opposite Hana Financial and PanGen Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Financial position performs unexpectedly, PanGen Biotech can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in PanGen Biotech will offset losses from the drop in PanGen Biotech's long position.| Hana Financial vs. KB Financial Group | Hana Financial vs. Shinhan Financial Group | Hana Financial vs. Woori Financial Group | Hana Financial vs. Samsung Electronics Co |
| PanGen Biotech vs. DB Financial Investment | PanGen Biotech vs. Hana Financial | PanGen Biotech vs. DB Insurance Co | PanGen Biotech vs. Jeju Bank |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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